Manhattan Apartments — the rental brokerage that has been on a long, public slog through financial troubles and litigation in the years since the recession began — has ceased operations, The Real Deal has learned. The firm’s remaining agents have the option to join rental rival AC Lawrence, a division of the Bellmarc Group, which will take Manhattan Apartments’ 11,000-square-foot space at 729 Seventh Avenue in the Times Square area.
The 27-year-old firm, helmed by Jerry Weinstein — a figure described by competitors as inspiring a “cult-like following” — had failed to pay brokers for months, forcing them to do deals in cash in order to get paid, said an agent formerly with Manhattan Apartments, who asked not to be named.
Manhattan Apartments “owes millions,” to other companies and its former agents, the source said. Last week, the phones at the firm’s office were disconnected, and earlier this week their website went dark.
Exact numbers on how many agents have opted to join AC Lawrence were not immediately available, although many agents planned to depart for other companies after learning of the firm’s closure, the source said. Weinstein will join AC Lawrence as a consultant, a representative for the firm said.
“By joining AC Lawrence, our leadership team will be unparalleled in New York City in terms of landlord relationships, years in the rental business and name recognition,” Weinstein said in a statement to TRD this evening.
AC Lawrence was acquired last month by Bellmarc Companies, the parent company of Bellmarc Realty, one of Manhattan’s largest residential brokerages. The consolidated company, known as the Bellmarc Group, has about 400 agents. However, the two brokerages are maintaining separate identities and cultures, Bellmarc owner Neil Binder told TRD when that deal closed.
Manhattan agents who choose to join AC Lawrence will have access to Bellmarc’s sales training, executives said.
“We hope to welcome many of Manhattan Apartments agents to AC Lawrence,” Anthony DeGrotta, principal at Bellmarc, said in the statement.
Larry Friedman, also a principal with Bellmarc, said he expected most affected agents to be interested in joining his firm. “We’re used to accommodating teams,” he added.
Despite their shared emphasis on rentals, Manhattan Apartments and AC Lawrence might seem like strange bedfellows — a 2011 lawsuit between the two firms was still pending as of last week, a source said, although it has now been resolved.
Weinstein filed the lawsuit in New York State Supreme Court against AC Lawrence and its principals, Larry Friedman and Anthony DeGrotta, and Weinstein’s then-business partner, supermarket mogul Leonard Franzblau, alleging breach of contract and fraud and asking $10 million plus punitive damages, as TRD reported at the time.
Franzblau, an investor who brought a cash infusion to Manhattan Apartments several years ago, countersued with the AC Lawrence principals that same year, alleging that Weinstein “‘froze out” Franzblau, Friedman and DeGrotta, according to court documents. The three said Weinstein’s attack was essentially a pre-emptive strike, because he believed his partners and consultants would sue him, since they were allegedly denied access to company documents and company email.
The two companies have filed a stipulation of discontinuance, to end the suit, Friedman said.
But Manhattan Apartments — a mainstay of the rental section of the real estate industry for years and the second largest rental firm on The Real Deal’s 2007 ranking — has been on the rocks for years.
In 2009, observers speculated that the company was kaput, as the firm owed hundreds of thousands of dollars to vendors, clients, landlords, agents and this magazine. Weinstein’s generous salaries — the firm also employed a number of his family members — resulted in huge a overhead for the company, and after the housing market crashed, the firm never recovered, sources told TRD.
Still, the closure of the firm represents an end of an era of sorts. The high volume brokerage got many New Yorkers their first apartment in the city, and was the “baby” of a hardscrabble self-made Brooklyn native who began his professional life as a maître d’ at another stalwart New York City institution: the Russian Tea Room.
“Jerry is an icon in the rental world,” Friedman said. “I don’t think anyone has been around as long as Jerry — and [now] he’s still around, which is great.”